The Financial Conduct Authority (FCA) today revealed it has fined JLT Specialty Limited (JLTSL) £7,881,700 for significant financial crime control failings - which in one instance allowed bribery of over $3 million to occur.
UK-based JLTSL provided insurance broking, risk management and insurance claims services as part of JLT Group plc, which had several subsidiaries around the world. The firm placed business in the London reinsurance market for JLT Re Colombia (another JLT group company). The business had been introduced by a third-party based in Panama.
According to the FCA, between November 21, 2013, and June 06, 2017, JLTSL paid $12.3 million in commission to JLT Colombia Wholesale Limited (the parent company of JLT Re Colombia), which then, in turn, paid $10.8 million to the third-party introducer. This introducer then paid over $3 million to government officials at a state-owned insurer to help retain and secure their business for JLTSL and JLT Re Colombia.
In a Press release, the FCA highlighted that it found that JLTSL “failed to manage their business and risks responsibly and effectively.” Commenting on the findings, Mark Steward, executive director of Enforcement and Market Oversight noted that lax controls by JLT Specialty saw money make its way into the pockets of corrupt officials.
“It is because of risks such as this that we are maintaining our focus on financial businesses’ financial crime systems, taking action where these firms fall short,” Steward added.
The FCA also stated that JJLTSL’s self-report in June 2017 and assistance during the investigation - including providing investigators with access to materials from JLT Group’s internal investigation - were mitigating factors when establishing the appropriate level of financial penalty.
